AdEx Benchmark 2016 Study

1. May 2017

2. The data and charts shown in this
report cannot be used without the
expressed permission of IAB Europe
and IHS Markit

3. About the study

4. A meta-analysis of online ad spend in Europe
RATECARD
Campaigns x
Ratecard
GROSS
Spend Billed
NET
Revenue Billed
No Agency commissions

5. Data for 27 countries in Europe
• Austria
• Belarus
• Belgium
• Bulgaria
• Czech Republic
• Croatia
• Denmark
• Finland
• France
• Germany
• Greece
• Hungary
• Ireland
• Italy
• Netherlands
• Norway
• Poland
• Russia
• Romania
• Serbia
• Slovakia
• Slovenia
• Spain
• Sweden
• Switzerland
• Turkey
• UK

6. About the data
This market sizing is based on the following methods:
• Reported data from national IABs
• Estimates by national IABs based on local insight
• Estimates by national IABs in collaboration with IHS Markit
• Estimates & actuals by IHS Markit based on the IHS Advertising Intelligence Service & macro-
economic research group

7. Big Picture

8. Europe: the value of online advertising in 2016
€41.9bn

9. Eurozone macroeconomic environment has stabilised after two recessions
and holds firm despite political uncertainty
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1
2016Q3
2017Q1
Eurozone France Germany Italy Spain
GDP growth in Eurozone (%)
Source: IHS Markit © 2017 IHS Markit
Growth

10. Online advertising grew by 12.3% in 2016
37.2
41.9
0
5
10
15
20
25
30
35
40
45
2015 2016
Online advertising spend in Europe (€bn)
+12.3% like-for-like

11. €35.3bn net addition in 11 years of this study….
6.6
9.2
14.5 15.8
18.8
21.9
24.4
28.6
32.1
37.3
41.9
0
5
10
15
20
25
30
35
40
45
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total online ad spend: historical perspective
€35.3bn
*restated from €36bn as measured in 2015 due to methodology change at local IABs

12. …as online offsets losses of traditional media, establishing a new
advertising market high for the first time since the 2009 recession
97.09 101.37 96.9
77.94 82.92 82.71 79.23 75.07 73.16 72.25 70.81
6.6
9.2 14.5
15.8
18.8 21.9 24.4 28.6 32.1 37.3 41.9
0
20
40
60
80
100
120
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Traditional vs online advertising (€bn)
Other Media Online €112.6bn
Peak
‘traditional’
media
New market
high (+€1.2bn)
Recessionary
market low
Historical
market high
Flat market
Online growth
offsets decline

13. ”Plus ça change, plus c'est la même chose”: consistency in growth rates
over past five years despite fundamental market restructure
39.0%
58.6%
8.9%
18.6%
16.5%
11.5% 11.9% 11.6% 13.0% 12.3%
0%
10%
20%
30%
40%
50%
60%
70%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Historical online advertising market growth
Maximum 1.6ppt variation in
growth over the past 5 years

14. Online expands its lead over other media categories*
0.7
5.4
7.2
25.2
33.9
36.8
0.7
5.2
7.4
23.2
34.0
41.9
0 5 10 15 20 25 30 35 40 45
Cinema
Radio
OOH
Print
TV
Online
2016 2015
Ad spend by category in Europe in 2015 and 2016 (€bn)
Source: IHS Markit
*broadcaster online video accounted for in the
‘online’ category. TV is linear TV advertising only.

15. Markets

16. After four year period of growing concentration on top markets, the long-
tail of smaller markets increases its overall share for the first time
57.3%
56.9%
58.8%
60.4%
58.0%
69.4%
69.9%
70.8%
70.5%
69.8%
77.9%
78.2%
78.8%
78.4%
77.7%
86.6%
86.4%
86.5%
86.4%
86.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016
Share of European online advertising revenue by market group
Top 3 Top 5 Top 7 Top 10

17. 934
946
1,604
1,622
1,689
2,295
2,640
4,175
5,950
14,181
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
Switzerland
Belgium
Sweden
Spain
Netherlands
Italy
Russia
France
Germany
UK
Top 10 markets ranked (€m)
2016 2015
UK is 2.4x Germany
UK as big as next 3 markets combined
Top 8 in stable ranking, Belgium & Switzerland move up, UK maintains
lead over other markets

18. Growth is mostly lead by smaller CEE markets
36.9%
33.2%
31.4%
25.3%
23.6%
22.9%
22.5%
22.3%
21.8%
19.3%
17.7%
17.5%
15.5%
14.6%
13.5%
13.4%
13.4%
12.3%
11.6%
11.5%
11.3%
10.1%
9.6%
7.0%
6.4%
6.2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Romania
Slovenia
Ireland
CzechRepublic
Slovakia
Bulgaria
Hungary
Spain
Sweden
Russia
Croatia
Serbia
Belarus
Poland
Turkey
UK
Switzerland
EuropeanAverage
Austria
Greece
Netherlands
Italy
Denmark
France
Germany
Belgium
Online advertising YoY growth 2016

19. Most advanced and least mature markets grow faster, tight grouping
among Western European markets
Year-on-yeargrowth
European average lines
online ad spend per capita
Bulgaria
Belarus
Croatia
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Netherlands
Norway
Poland
Romania
RussiaSerbia
Slovenia
Spain
Austria
Belgium
Sweden
SwitzerlandTurkey UK
Slovakia
0%
5%
10%
15%
20%
25%
30%
35%
40%
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250

20. Three distinct patterns emerge
Year-on-yeargrowth
European average lines
online ad spend per capita
Bulgaria
Belarus
Croatia
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Netherlands
Norway
Poland
Romania
RussiaSerbia
Slovenia
Spain
Austria
Belgium
Sweden
SwitzerlandTurkey UK
Slovakia
0%
5%
10%
15%
20%
25%
30%
35%
40%
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250

21. What enables & hinders growth according to national IABs?
Drivers
• Programmatic & automation
• e- and m-commerce
• Rise of online video consumption
• Premium video inventory
• Improvement in ad quality
• Mobile-first advertiser mentality
• Social platforms
• Native
• E-Sports
• Consolidation
Hurdles
• Ad blocking
• Fraud
• Complexity of value chain
• Brand safety
• Privacy & regulation
• Measurement (esp. omniscreen video)
• Cross-funnel and cross-media attribution
• Turning data into insight
• Adapting desktop ads to mobile
– High production costs
– Structural barriers
• Platform distribution & monetization
• Macroeconomic environment and adverse political
conditions

22. Formats

23. €5bn added in total, over half of that coming from display
14,199 16,196
6,061
6,510
16,932
19,116
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2015 2016
Online advertising spend by format
(€m)*
Display Classifieds & Directories Search
1,997
449
2,184
0
5,000
10,000
15,000
20,000
25,000
Display Classifieds &
Directories
Search
Net additions in 2016 (€m)*
2015 2016 net additions
*Not like-for-like 2015 vs 2016 due to methodology changes in
Croatia & Czech Republic. Growth rate cannot be calculated.
Please use 12.3% like-for-like growth rate. Excludes small
number of ‘other’ that was reported without format designation.

24. Display has been the fastest growing format for the past three years, but
classifieds & directories and search experience growing vibrancy
15.2%
5.8%
10.8%
11.6%
17.2%
4.9%
12.5% 13.0%
14.1%
7.4%
12.9%
12.3%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Display Classifieds & Directories Search Total
Online advertising growth rates by format
2014 2015 2016

25. Search maintains lead, but display increases share
34.1% 36.6% 36.6%
47.3% 48.0% 47.1% 48.8% 49.2% 46.7% 46.7% 45.6%
18.3% 14.9% 18.9%
18.9% 20.7% 19.6% 18.5% 16.8%
15.6% 16.4% 15.6%
47.6% 48.5% 44.5%
33.8% 31.3% 33.3% 32.7% 34.0% 37.7% 36.9% 38.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Online advertising spend split by format
Search Classifieds & Directories Display

26. 15 markets grow above European average, incl. 4 out of the top 10
markets by size, but spectrum of growth between markets is vast
45.4%
41.3%
38.1%
29.3%
29.0%
28.6%
24.7%
24.1%
22.0%
20.4%
19.6%
17.8%
17.6%
15.5%
14.6%
14.1%
13.0%
11.3%
11.3%
11.0%
10.7%
9.6%
6.5%
6.5%
5.9%
3.1%
1.0%
-4.3%
-5%
5%
15%
25%
35%
45%
55%
Ireland
Slovenia
Romania
Slovakia
Bulgaria
CzechRepublic
Hungary
Spain
Croatia
Russia
Austria
Serbia
Poland
UK
France
Europeanaverage
Sweden
Italy
Netherlands
Greece
Turkey
Denmark
Finland
Germany
Belgium
Switzerland
Norway
Belarus
Online display growth in 2016 by market*
incl. video. Desktop & Mobile.

27. Uneven picture across Europe as classifieds & directories benefit from
consolidation, but shift to display-based ad model
20.5%
19.3%
19.0%
18.0%
17.0%
16.4%
16.3%
10.6%
10.6%
9.9%
8.9%
8.0%
7.8%
7.5%
7.4%
6.2%
6.1%
6.1%
5.8%
3.6%
3.6%
2.0%
1.9%
1.6%
0.4%
-0.1%
-0.4%
-25.7%
-30%
-20%
-10%
0%
10%
20%
30%
Hungary
CzechRepublic
Serbia
Poland
Belarus
Italy
Slovakia
Germany
Russia
Switzerland
Netherlands
Croatia
UK
Denmark
Europeanaverage
Turkey
Belgium
Spain
Bulgaria
Greece
Ireland
Romania
France
Finland
Sweden
Norway
Austria
Slovenia
Online classifieds & directories growth in 2016 by market

28. 19 markets saw double-digit growth in paid-for-search
44.9%
42.9%
36.1%
28.0%
25.1%
21.4%
21.0%
20.8%
20.7%
20.1%
19.2%
19.2%
16.0%
15.0%
14.4%
12.9%
12.4%
12.2%
12.0%
10.1%
9.0%
8.0%
7.6%
7.3%
6.5%
6.4%
5.0%
4.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Slovenia
Belarus
Sweden
Romania
Ireland
Russia
Hungary
Switzerland
Spain
Turkey
Norway
CzechRepublic
Croatia
Serbia
UK
Europeanaverage
Slovakia
Netherlands
Greece
Denmark
Poland
Austria
Belgium
Bulgaria
Finland
Italy
Germany
France
Search growth in 2016 by market

29. Mobile shares of format leap by nearly10 percentage points year-on-year
26.8%
23.9% 24.7%
36.0%
32.2% 33.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Mobile share of display Mobile share of search Mobile share of total
Mobile share of online ad spend by format*
2015 2016
*only markets which reported both mobile display & mobile search considered

30. A €3bn market, video now is a vital component of online display…
29.9%
27.8%
27.1%
26.7%
24.6%
23.9%
22.1%
21.5%
21.4%
19.7%
18.9%
18.5%
18.5%
16.8%
16.0%
15.6%
15.9%
14.5%
13.9%
12.7%
11.8%
11.7%
11.5%
9.4%
9.0%
7.5%
3.1%
0%
5%
10%
15%
20%
25%
30%
35%
Italy
Switzerland
Belgium
Bulgaria
Croatia
Ireland
Sweden
CzechRepublic
Spain
France
Germany
Europeanaverage
Netherlands
Turkey
UK
Austria
Finland
Greece
Russia
Slovenia
Poland
Denmark
Belarus
Norway
Serbia
Hungary
Romania
Video share of online display in 2016
Total: €2.9bn

31. …and growth is near universally double-digit within 3 clusters
122.0%
102.6%
100.0%
91.8%
80.0%
48.0%
46.0%
33.6%
27.6%
26.8%
26.3%
26.0%
25.0%
24.6%
21.4%
19.6%
19.4%
17.4%
16.5%
15.2%
13.9%
13.9%
11.9%
11.7%
11.0%
10.4%
1.2%
0%
20%
40%
60%
80%
100%
120%
140%
Slovenia
Serbia
Belarus
Ireland
Croatia
Denmark
Italy
Turkey
Spain
Sweden
Austria
Netherlands
Belgium
Romania
E.average
Bulgaria
Germany
Finland
CzechRepublic
Russia
Norway
Switzerland
UK
France
Greece
Hungary
Poland
Online video advertising growth in 2016
growth leaders +/- 10ppt range of average challengers

32. Mobile display is highly concentrated, but 14 out of 22 countries
measured grew faster than the market leader*
2,645
677
606
258
178
168
139
129
124
107
100
66
51
49
39
25
24
5
4
1.4
0.9
0.5
0
500
1,000
1,500
2,000
2,500
3,000
UK
Italy
Norway
Netherlands
Turkey
Ireland
CzechRepublic
Denmark
Austria
Romania
Croatia
Mobile display advertising 2016 (€bn)
327.0%
191.3%
156.3%
107.7%
95.0%
89.5%
86.6%
85.1%
79.7%
72.6%
66.7%
64.4%
52.9%
51.9%
51.6%
45.3%
37.3%
36.7%
34.7%
33.4%
30.9%
26.6%
26.5%
0%
50%
100%
150%
200%
250%
300%
350%
Serbia
Romania
Turkey
France
Croatia
Ireland
Russia
Bulgaria
CzechRepublic
Hungary
Belarus
Poland
Europeanaverage
Denmark
Italy
UK
Sweden
Austria
Netherlands
Finland
Spain
Norway
Germany
Mobile display advertising growth in 2016
*5 countries did not report mobile display

33. 0
500
1,000
1,500
2,000
2,500
3,000
UK
France
Italy
Germany
Norway
Sweden
Netherlands
Russia
Turkey
Poland
Top mobile display
+2 ranks vs all
display
Market leaders are not created equal: the top 10 ranking by display
market size looks different in mobile and video
0
100
200
300
400
500
600
700
800
900
UK
Italy
Germany
France
Spain
Belgium
Netherlands
Sweden
Russia
CzechRepublic
Top video
0
1,000
2,000
3,000
4,000
5,000
6,000
UK
Germany
France
Italy
Spain
Russia
Netherlands
Sweden
Belgium
Poland
Top all display
Only in
mobile Only in
mobile
+1 rank vs
all display
-2 ranks vs
all display
+1 rank vs
all display
Only in
video
-3 ranks vs
all display
+2 ranks vs all
display
+3 ranks vs all
display
Not in top
mobile
Not in top
video
Not in top
mobile

34. Desktop banner is decline as video and mobile power growth
-35%
-25%
-15%
-5%
5%
15%
25%
35%
45%
Ireland
Slovenia
Romania
Slovakia
Bulgaria
CzechRepublic
Hungary
Spain
Croatia
Russia
Austria
Serbia
Poland
UK
France
Europeanaverage
Sweden
Italy
Netherlands
Greece
Turkey
Denmark
Finland
Germany
Belgium
Switzerland
Norway
Belarus
Display growth composition in 2016
all display

35. Desktop banner is decline as video and mobile power growth
-35%
-25%
-15%
-5%
5%
15%
25%
35%
45%
Ireland
Slovenia
Romania
Slovakia
Bulgaria
CzechRepublic
Hungary
Spain
Croatia
Russia
Austria
Serbia
Poland
UK
France
Europeanaverage
Sweden
Italy
Netherlands
Greece
Turkey
Denmark
Finland
Germany
Belgium
Switzerland
Norway
Belarus
Display growth composition in 2016
all display excl. mobile

36. Desktop banner is decline as video and mobile power growth
-35%
-25%
-15%
-5%
5%
15%
25%
35%
45%
Ireland
Slovenia
Romania
Slovakia
Bulgaria
CzechRepublic
Hungary
Spain
Croatia
Russia
Austria
Serbia
Poland
UK
France
Europeanaverage
Sweden
Italy
Netherlands
Greece
Turkey
Denmark
Finland
Germany
Belgium
Switzerland
Norway
Belarus
Display growth composition in 2016
all display excl. mobile excl. mobile & video

37. Outlook for 2017
• Expect approximately +10% growth over 2016
• Concentration of growth among fewer players will accelerate
• Video will become the primary battleground for consumer attention
• Live video set to focus on sports and UGC
• E-Sports advertising is gaining traction
• Audio is increasingly attractive to marketers
• Mobile-first becomes AI-first (but promise & practice are far apart)
• Regulation will have a material impact on the future health of the market

38. Contact:
Alison Fennah – fennah@iabeurope.eu
Marie-Clare Puffett – puffett@iabeurope.eu
Daniel Knapp – daniel.knapp@ihsmarkit.com
Qingzhen (Jessie) Chen – jessie.chen@ihsmarkit.com
Connect with us:
@IABEurope IAB Europe
www.iabeurope.eu www.technology.ihs.com
@IHS4Tech